Government Operations Committee on Dec. 7th, 2017

[Erin Weir, NDP, Regina—Lewvan, SK]

We heard about this from indigenous business as well—the problem of shell companies being used to acquire contracts for other enterprises that might not be aboriginal. I just wanted to explore the same question.

I don't want to exclude people coming in by video conference. Ms. Sheppard, do you have anything to add on these points?

[Paula Sheppard]

Yes.

I've had experience with Mary's certification and others across Canada. With the issue you just brought up, the companies in name only, the certification will ensure that doesn't happen. Our staff were the site visitors, as Mary said, so I'm well aware of what they're asking for.

One of the first things they're looking for when they go into that business is that the woman is the decision-maker and is the one actually running the business. It's very easy to tell when you visit a company whether that person is running it. One of the things that the certification will do is to move away from the name-owned businesses.

I don't think you'll have an issue with that early on, but as you start to purchase from smaller diverse businesses, then you will maybe see that, and you will need to look into making sure they are verified.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

Ms. Anderson, you mentioned the notion of adding some points for a business being women-owned in federal procurement.

Is that the type of system you have proposed, or are you looking for perhaps a set-aside for women-owned businesses, as exists I believe in the United States? I'm wondering if you could speak to those options and the pros and cons of each.

[Mary Anderson]

I'm going to invite Stephanie to respond to that.

[Erin Weir, NDP, Regina—Lewvan, SK]

Perfect.

[Stephanie Fontaine, Vice-President, Women Business Enterprises Canada Council]

We have talked about that. In terms of the points, that would be to encourage, as Mary said earlier, both the suppliers and the corporations that are doing the supplier diversity programs. In terms of the set-aside, I agree with what Paula said earlier: we need to see how we're doing first, so that we can then set realistic targets.

However, we'd like to present an alternative view of the set-aside: instead of using a percentage, you could set aside categories or areas that may be most readily suitable for this kind of engagement to begin with. That could be where some of the women businesses are already operating and doing business. We know that in a lot of the women businesses—I think it's 62%—more women go into businesses that are service- or retail-related, so that may be an area to look into. It's setting aside a category or area, as opposed to a percentage.

That's just something more innovative to think about.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

In that type of model, are you convinced that there would be a lot of competing bidders in the set-aside category? Is there any risk of picking an area where a given business already has the contract, and then setting it aside and thereby reinforcing an existing supplier to the exclusion of others?

I know one of the concerns that I believe you expressed—

[Stephanie Fontaine]

That was one of them, yes.

[Erin Weir, NDP, Regina—Lewvan, SK]

—previously about federal procurement is that sometimes the federal government gets comfortable with an existing supplier and just keeps using them and doesn't give the opportunities to others.

[Stephanie Fontaine]

Yes, that's a good point.

However, I think it's about doing the outreach and breaking the barriers and finding those other suppliers. As you were saying, it may not be the ones who are already there, but it's the women we talked about or others who have something to offer, but they've chosen not to bid on a contract because it's too complicated.

Once we address some of those areas, I think you will find there will be others who will come forward and there will be new opportunities, but your point is well taken.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Madam Ratansi, you have seven minutes, please.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you very much.

Please let me know when there are two minutes left, because I'm sharing my time with Ms. Ludwig.

Thank you all for being here. It's quite interesting to hear about women's businesses and what you're doing to help women's businesses. When I was in Bangladesh, they were talking about how women's enrolment in business, or empowerment in business, would contribute 3% to the GDP. Thank you for bringing that figure from Newfoundland's perspective.

I find there are a lot of challenges that women are facing, and having been a small and medium-sized enterprise myself who worked with business owners, I know it is very difficult to figure out how to go through government contracting.

I'm wondering whether any of your membership, as you're advocating on their behalf or training them, have looked at OSME, the Office of Small and Medium Enterprises.

I'm going to give you two questions, and maybe you could address them that way. There's also the innovation fund. Are they approaching that fund to be more innovative?

From a Newfoundland perspective, you talked about micro-businesses, and I guess Royal Bank used to be very supportive of micro-businesses. How do you gel those micro-businesses synergistically so that they can bid on programs?

My last question is, would you like an American system whereby they set aside 5% of the government procurement for women-owned businesses?

[Paula Sheppard]

First, with regard to the 5% set-aside, for percentages of set-asides, you have to be careful. I would like to say yes, that I would support the 5% set-aside, but we need to find out who's available to supply. One of the issues that we had here in Newfoundland and Labrador was that we didn't want to go out and say you had to do a certain percentage of business with women-owned businesses if we didn't know that they existed in terms of being able to supply.

What is your supplier capacity versus the contracts you're putting out? That's a very big information piece. Is there a match? If only 1% of businesses can even bid on these contracts and you're asking for a 5% spend, you might be setting yourself up for an unsuccessful project. Really, it's about fact-finding and making sure there's a fit between them.

On the other part of your question on the innovation fund and OSME, yes, we do use OSME. We find OSME is very helpful when it comes to outreach. I think there's a larger role for OSME, us, and our business owners, and I think that's going to have to be spearheaded. I mean, we do it all the time, and we do bring OSME in, and they do work with them, but what's missing in that equation is the knowledge about possibility. If they think it's more possible, and we take down some of those barriers and make it easier to do the work with the federal government, our members will be more likely to then come and bid on those projects.

In that connection, our businesses are very small here—one to four employees, I would say. Revenues are also less than $200,000 for most of our members, so what we've been encouraging.... It's taken us a long time, and this is a cultural thing. I think Mr. Whalen would be able to support me on this, but traditionally Newfoundlanders have been holding things very closely and are very secretive and tight, because they don't want someone else to know what their business is and know what's going on.

We see this in a lot of markets. We've worked very hard over the last few years to let these people know that if you're a small business with one to four employees, you may never have the capacity to do this on your own. You have to partner with somebody else. We've done a lot of development on our side to help our businesses learn how to consult a lawyer to get a partnership agreement, how to team up on contracts, and how to be successful in that piece, because if we don't encourage them to work together, sometimes they're not going to be able to get it on their own anyway.

With regard to the innovation fund, yes, we are aware of it. What I don't like about some of the programs that the government has is that they're very sector specific. If you're looking at innovation tech, ocean tech, or aquaculture, those are not the sectors that women are in. WBE Canada talked about that as well. Most of them are in the service sector, and they are highly under-represented in the innovation and tech sector. We need to work on that. I think we're 10 years away from it.

I see you're going to cut me off.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I have two minutes and I have to give it to Ms. Ludwig.

I'm sorry. You can answer the question if Ms. Ludwig wants you to answer it.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

Good morning, ladies. This has been a fascinating conversation.

Looking at the fact, Ms. Sheppard, that you spoke specifically about micro-businesses, and Ms. Anderson, that you spoke about limited contacts, networks, and under-representation, I have two questions here.

One, is there a possibility, or does it exist, for an online workshop on the procurement process, specifically addressing the resources, the eligibility, the networks, mentoring, and supplier training, as well as the potential and the opportunities with partnerships?

Two, because these are micro-businesses, many of them with one to four people, what's the best way for the federal government to promote such a workshop and to reach them with their limited contacts and limited networks? In some cases these women are working in their basements or in isolated situations, and we want to pull them out of the basements and get them to experience more.

Thank you.

[Paula Sheppard]

I'll answer that very quickly because I know we're short on time.

Absolutely, yes, we do offer things by webinar all the time, and I know Mary does as well.

The best way to get that information out is to contact organizations like NLOWE. I'm part of an organization called WEOC, the Women's Enterprise Organizations of Canada. It's a group of organizations like NLOWE that formed an association. Our reach is more than 100,000 women in Canada, so just sending it to me means I can send it to them, and Mary as well, I think, would answer the same.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, you're out of time.

However, our next questioner for five minutes will be Mr. Shipley. He may want to follow up on your lead.

Mr. Shipley, you have five minutes.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much to both of you. I've been out to Newfoundland two or three times from Ontario. It's an amazing part of our country. Thank you for being here.

When we talk about so many micro-businesses and small businesses, they're often in rural small towns and villages. How big a role does perception play in terms of women's businesses, as compared to the affording of contracts to non-women's businesses? That question goes to both of you.

[Paula Sheppard]

Can you define what you mean by “perception”, and how big this perception is?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Is there a perception that women's businesses can't deal with it, that they don't have the resources or the abilities or they haven't been in business long enough? Is there the perception that women can't do it as well as the companies that are owned by men? Do you see that as a barrier and a perception that you need to overcome?

[Paula Sheppard]

Definitely. We definitely see confidence as an issue. Statistics will show you that a male entrepreneur will fail at least three times. The business of a female entrepreneur sometimes will fail once and she'll give it up.

In order for businesses to be successful, they need to fail at least two to three times, so that's where some of those numbers are coming from—

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

They give up after what? Help me. I'm sorry to interrupt, but why is that? Is it because of that intimidation?

[Paula Sheppard]

Yes. It has to do with confidence. It has to do with lack of support around you, lack of networks, again, and just basic inherent confidence issues. If a woman's business fails, lots of times she'll attribute it to her own personal characteristics: “I'm not cut out to be a business owner”, “I should be spending time taking care of my elderly parents”, or “I don't know enough about the financial side”, whereas in the male-owned businesses, they'll attribute their failure to “It just didn't work out for me this time” or “They didn't understand my product and I'm going to do it again.” There is that inherent cultural bias that happens.

What we find in Newfoundland and Labrador, especially because a lot of our businesses are rural businesses, is that there is a really big need for support networks. At NLOWE I have nine business advisers, but seven of them are in rural areas of Newfoundland and Labrador. What's really been our success model is that our business advisers will drive out to the businesses and they'll meet with the business owner at their place of business.

As well, then we create networks. We create peer mentoring groups, we create training opportunities, and we do a conference every year, and those are the supports they need. If you look at the basic skill set, one thing that comes back to us a lot from our business owners is “I don't know enough about business.” Well, I would say that 90% of business owners don't know a lot about business. They're just really good at one thing and they make it into a successful business, but they had the wherewithal to hire the people to do that. That's what we're really teaching people.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you for that.

Mary, maybe you can expand, but I think that for businesses in rural areas, it's a challenge across our vast country—